The latest firmware gives you the possibility to apply the latest improvements to your device.

iOS features an easy-to-use interface, amazing features, and rock-solid stability, and it is the foundation of iPhone. And even as other phones try to catch up, the technologies and features built into iOS 4 keep it years ahead of the competition.

You can use iTunes to update or restore iPhone or iPod software. Apple recommends updating iPhone or iPod touch to use the latest software. You can also restore the software, which puts iPhone or iPod touch back to its factory condition.

Normally if you choose to update, the iPhone or iPod software is updated but your settings and media are not affected. If your device currently has a software version prior to 2.0 (1.x) and you are updating to software version 2.0 or later, all data on your device will be erased in order to perform install the new software.

In this case, iTunes will offer to create a one-time media backup of your device depending on what content is on your device and what content is stored in the iTunes Library you are connected to.

You should ensure that you have enough free space on your Mac or PC to accommodate a backup that matches the capacity of your iPhone or iPod (4 GB, 8 GB, 16 GB, or 32 GB) if you proceed with the this backup.

If you choose to restore, all data is erased from iPhone or iPod, including songs, videos, contacts, photos, calendar information, and any other data. All iPhone or iPod settings are restored to their factory condition.

iTunes Home Sharing:
- Play music, movies and TV shows from a shared iTunes library on a Mac or PC (requires iTunes 10.2)

New AirPlay features:
- Play videos from the Photos app including the Camera Roll album, iTunes previews, enabled third-party apps and websites on Apple TV
- Play slideshows from Photos on Apple TV using transitions available on Apple TV

Ping features:
- Push notifications for comments and follow requests
- Post and Like songs directly from the Now Playing screen
- Parental controls

New Settings:
- Messages setting for number of times to repeat an alert
- iPad side switch setting to lock screen rotation or mute audio notifications and sound effects
- Single tap conference call dialing with a pause to send a passcode
- Bug fixes

How to update / restore your iPhone/iPod using the downloaded IPSW file:

1. Download the firmware for your device
2. OPTION-click (on Macs) or SHIFT-click (on PCs) on the Update / Restore button in iTunes
3. Now you will be able to tell iTunes to use the IPSW file you downloaded to update / restore your iPhone/iPod

Here's other similar drivers that are different versions or releases for different operating systems: